Strategy and Innovation

October 26, 2015

Companies that are facing industry disruptions are bad enough; during these times leadership faces the most important test – the ability to lead during a crisis. The need of foresight, change and organization design are what true leadership looks like. Some sees this an opportunity to gain power and fulfill their thirst for greed and this needs to be stopped. Because strategic leadership matters… whether through malice or naïveté, those who abuse or tolerate the abuse of leadership place companies at risk.

Poor leadership cripples businesses abilities to accept new realities, correct mistakes and make strategic bets. At lower levels in the hierarchy, the problem was even more severe because in decisions and lack of strategy. Seeing things for what they are. Strong crisis leaders live on the front end of reality and speak in future tense. They recognize systemic drivers and their significance and do not shy away from the consequences of what they see. Foresight and strategic intellectual integrity is a key component of crisis leadership; they think of what is best for the organization, not their own personal or political gain. Poor strategic leadership is often the results of the following:

THE FALLACY OF FORESIGHT

Poor leadership assumes that the climate will gradually improve and things will not get worse. They think the future is predictable and they have a good pulse of the market better than others. Often what they have is groupthink. The reality is things do get worse and they are still reacting to the shift rather than getting ahead of the shift. They could not connect all the variables that are shaping the future of the business and fail to calculate the unforeseen market, industry, technological, social, and behavioral shifts. The fallacy of prediction inevitably led to the downfall of many businesses.

Strategic foresight is often lacking to allow the companies think ahead of the curve. Strategy and detail with speed and clarity. They are able to see the big picture. They can see all of the moving parts and understand what is cause and what is effect. They get below the 30,000ft level and can dig deep into detail without being mired in it. They quickly develop a very detailed knowledge of the issues. This ability further enhances their capacity to view the problem realistically.

THE FALLACY OF SECRECY

Poor leadership believes it is better to shield middle and junior employees from the seriousness of the crisis and radiate a false sense of comfort hoping people won’t read what’s out there. The most common defensive speech usually include 1/ We still a very loyal customer base and they are very loyal to us 2/ We still have a lot of cash 3/ Our product is good and we need better marketing 4/ We are not aggressive enough in pricing. All wrong. Many of these can go away very quickly. Companies should connect their passion points to a foresight-based business strategy that are executable to secure their support and commitment.

THE FALLACY OF ORGANIZATION

Poor leadership usually based them on the notion that a new organization structure is important to formally show the transformation. Any formal organization redesign takes too much time to execute and slow down the transformation. This is the time where they should get rid of people’s title and organize as hubs and networks to executive their strategies. It needs to act as an attacker not a defender. Defender usually won’t survive. Leaders must be strong enough to hold themselves (and the board) accountable for the past transgressions of turning a blind eye from right and poor decisions or indecisions that led to the current state. Current problems are most likely the results of decisions that were made 24-36 months ago. Strong leaders take ownership of the problem and acknowledge that no magic can undo these poor decisions.

They understand, however, that a long-term solution requires the input and involvement of many stakeholders. They identify those individuals and work together towards a solution that everyone can support and can live with. They also need to differentiate from those who take advantage of the crisis by advancing their own agendas even at the expense of the organization. The successful crisis leader seeks out individuals who have a different and strategic perspective on an issue even whose advice may be contrary to that of their board.

Crisis is the time for real strategic leadership. It is the time to deliver bad news when they need to and do it in a way that avoids panic and provides a realistic level of hope for the future. Above all, they are courageous enough to make sharp decisions, act with speed and take carefully calculated risks.

August 31, 2015

In an interesting conversation with clients this week and discussions were around the question: “should companies plan for the distant future (10 years and beyond) and what is needed to get out of a death spiral where a slow death is in the making?”

There is a big difference between growing with age and growing old. With age, it sometimes comes with wisdom. With more than a dozen of C-suite execs that I have worked with or coached, for most of them, the wisdom came one day after they had passed the age of 50. Growing comes with age, which sometimes take away the energy and urge to make radical change. Ask yourself or your organization, the last 5 years your company or yourself should be referred to as a “growth experience” or “aging experience”.

A CEO’s job is to make sure the company is growing with experience” and not “aging with experience”. Company needs constant renewal, the leadership team is expected to generate enough energy to motivate the entire company. You need a strategy to energize and motivate. Not empty speech and propaganda video and banners. Time doesn’t mean we gain more experience. Reinvention, renewal and resetting are mantras for growing experiences. We shape what we become. When companies are stuck in a stagnant mode or worse in a downward spiral, it is because of the experience they have. Not because the new things that they try. They are usually too old (state of mind), conservative, naive and irrelevant and that managerial mindset is holding the company back for serious reinvention.

A look back at many failing leaders’ biggest attempts to bring their companies back for the past 10 years reveals an embarrassing series of missteps, mistakes, and flat-out bad products, culminating in a flurry of poorly-executed uncommitted attempt to create and own a distinct market positioning. Most of the time, the product failed before they are being introduced. No one can do anything at that time. Think about the following:

We have been very good in making this and we should be fine.

We always do things this way. It is too risky for us to change.

Let’s watch where the market is going first. We can wait.

We need to do what Apple, Nike, Amazon and Starbucks do.

We should hedge our bets and try different things too.

Let’s give the market what they want and make sure we have a competitively cheaper offer.

If you do one or a few of the above, you will most likely be somewhere along the downward spiral. For companies to end the spiral of death, it takes more than cost-cutting and requires an orchestrated effort for everyone involved to imagine and see the possibility forward. It is about applying a practical future-oriented foresight to drive strategy and unleashing the company from legacy people, thinking and even management board. There is no place for the “old" in the world of constant resets.

July 10, 2015

Almost all companies at some point face some serious crisis. Sometimes it is clear that the end is near or coming and no can see the light at the end of the tunnel, at least not until you see it. Sometimes you know there is a way out but not sure how.Facing with disruptive changes driven by innovative technologies or shifting regulations, it is clear that the strategy is no longer working. You see the demand of your products is disappearing or new business models or low cost payers are eating your lunch. What do you do?

There is often a short window of opportunity to do something radically different; it has to be drastically different. Any incremental change or window dressing will push you closer to the end. If there’s a chance (there are always chances) of saving the company, make sure your executive team is focusing on three things. Read on.

For decades, I have been studying, observing, advising, and directing companies globally on their journeys to find growth, reignite growth, avoid decline, avoid death and reinvent themselves. Here are the three things you must pay attention to:

The first one is stop and think. Don't push the panic button. Go on a short vacation (go somewhere far) and find some time away from the madness and clear your mind. Think how to steer your organization’s course away from the one that got you into this mess in the first place. Don’t madly run around rearranging the decks chairs on a sinking ship. Find the source of problem and stop the leaking. Avoid hanging to the past, board of directors have different views and industry lifecycles are showing something different. The one thing for sure is what was working in the beginning would not work today and in times of uncertainty people go back to the past and hang on to something that once worked well.

Think what strategy will leapfrog you into the future. What business model options are there and what behavior will impact customer preference in the future. You need to think ahead more. Executive focus on rather short-term horizons due to public pressure in the case of public companies and forget about how important it is to create the future. They assume the same formula that gets them there in the first place can get them there to the future. Or they focus on internal politics and as a result cause inactions. The organizations are operating on old mental models and not recognizing that their business models have expired. They failed to reinvent their core and yet they have no clue on to how to invent the future. There are endless debates and power points but no action to invent the future.

The second one is to give your company a larger purpose. Don't underestimate the power of purpose. It needs to be big. It cannot be about you or customers, that’s not enough. What is your version of “making a dent in the universe?”

To keep people focused and inspired, give them something to work toward. We all need a reason to come to work (at least for the best people) and there is not a more important time to remind them. Otherwise they will leave. We all need a purpose; it is the only thing that people can hang on to through tough times. It is what makes the company resilient.

The third one is maintaining positive emotive energy. People are going to be worried, insecure, frustrated and even angry. You need to care about them and allow room for them to express it while making sure leadership radiates a sense of energy, not fear. Energy doesn’t come from empty words but a real sense of optimism backed by strategy and action.

A sound strategy to bring back the company is what forms the core of the energy and radiates them through open dialogue – not newsletter or email. Don’t drive these discussions underground and make sure all senior executives are available to talk with people. Open communication is important to maintain the trust.

All great companies go through very difficult times at some point and some even have near death experiences. They survive disruptions and even self-destruction in order for them to get to the next level. No companies are immune and anytime we think we are safe we are taking the first step on the path to decline. The concept of core competencies is an interesting idea. Whether the companies’ core competencies are giving products and services unique functionality or building a worldwide distribution, this could lead to a decision with companies avoiding to think "New Game." It provides logic for the strategy but also limiting strategic options. In the strategic making process, competencies need to go beyond the core. It is not a time to be academic. Strategy making is a dynamic exercise that allows you to see the whole system (industry) before you zoom into your value-creating activities.

When companies are on a path of rapid decline, and see the decline accelerating, they go into a panic mode and embark on multiple tactical measures that are not addressing the core problems. Being able to frame the core problems even under extreme pressure is critical and not putting 100% of your energy on things that doesn't matter. All the repeated unsuccessful tactical attempts will drain the company’s resources, human energy and customer confidence until they have no turning point. Maintaining the energy or Chi (Chi is a Chinese word meaning aliveness, life force energy or life breath) is vital for turnaround and it doesn’t matter if you have the right strategy, without the energy or Chi, you won’t be able to execute the strategy.

June 30, 2015

Let's try to paint a likely not-too-distant future. In this future, everything around us will be managed by algorithms. They manage and recommend what we want to watch; they control traffic of our driver-less cars; they control those drones which deliver our pizza; predict for you which one of your friends will become your future spouse, etc. They will make our life effortless and predict what things will happen next or what's best for us. We all wish that it is that simple.

As we are picking up massive data every second, algorithms are critical to how we make sense of them and our reliance on algorithms is growing by the second. But how much faith should we put into those algorithms, and how reliable they are depends on who you talk to. The accuracy of the algorithmic differentiation (automatic differentiation) is key in dealing with data volatility in many complex cases where accuracy of data is critical to the final outcome. I don’t know when we can have statistical evidence comparing how often driverless cars mistakes and how often human drivers make mistakes or how well a software program investing in stocks makes mistakes and human making investment mistakes.

We need to develop programs to check whether algorithms are working as they were intended and monitoring algorithms by the results they produce based on machine performance metrics. Vetting algorithms in advance isn't practical at all as many are too complex for their outcome to be predicted. Algorithmic differentiation is used to fine tune algorithms that are complex to optimize. We will be placing our faith into the accuracy of these algorithms and trusting that they will deliver. I think we may be over-optimistic and mining a lot of data using statistical analysis still has a very strong random component to it. To optimize these models we need algorithmic differentiation and sometimes it feels like a scientific random number generator. The more data we have, the more simulation is needed and the more reliance on the significance of data, and significance means sensitivities. We’re in the midst of a transformation when industries are exploring how to use big data to create new business models.

There’s one certain thing in big data, it’s that all algorithms are not created equal. The biggest question is how many jobs will disappear when algorithms take over human jobs? People ask the same question during the first industrial revolution when machines started making goods a lot faster and cheaper. Are we entering a world in which the algorithms themselves will be competing with humans? Honestly, I just don't like it when algorithms make decisions for us. They can help me analyze my options and probabilities, but not making a decision until they prove that they can think smarter than me. And so the game begins…

June 15, 2015

The world is becoming crazier and more exciting as Virtual Realities are becoming more real and the lines between our physical world and virtual word are fast becoming blurred. Next year 2016 will be an important year as companies are finally making virtual reality real with only 2 main players participating on the race: HTC/Valve, Facebook/Oculus will be making VR products available. Microsoft is partnering with both Valve VR and Oculus while Sony is pushing hard not to miss the bandwagon with Morpheus.

The user behavior of VR has yet to come to shape and will be evolving for the next 5 years, the idea of information conveyance is interesting and playing a special role in the realm of virtual and augmented reality. We are learning to design cues in the VR world to tell users where to move or go or to touch. This is still a challenge as don’t think about it that much in the physical world. We walk into a room assuming the chairs are moveable and the cabinets are not. That sense of reality has changed in the VR world. Anything can happen to everything. It is like living in a dream.Those who have experienced the HTC/Valve Vive were completely fascinated by the experience. HTC Vive is clearly ahead of the game.

For VR, unlike 2D gaming or in the real world, we have arrows and signage to tell people where they can go. In the VR world when user is wearing a head-mounted display, the users are actually operating in two realities – the real, knowing that the user is wearing these gears and the virtual, which is so immersive (more so for the HTC/Vive roomscale technology that allows you to walk around the room) and therefore difficult to find a frame of reference.

The question is do we want user to have the feeling of wearing a space suit or simply feeling they are acting as normal with no gears on them? The awareness of wearing a suit will remind people they are in a VR world unless the suit is a normal suit. While body motion sensing is great when body movements are being interpreted by motion sensors as perceived input and turns it into commands and controls. Basically, with this technology, you are the controller.

KOR-FX is making an interesting gaming VR vest that uses acoustic feedback that, in turn, is processed into haptic feedback. Its software analyzes the feedback felt by the user, depending on what’s going on with the on-screen and what the user is doing it with. The controller “acousto-haptics” is to define acoustic feedback that is being felt.

Sixense is another company currently developing a wireless solution to hand input in virtual reality with the STEM System making use of alternating current (A/C) electromagnetic field to accurately track body movements in terms of position and orientation within a radius of a stationary base.

In designing VR experience, the haptic side of things is perhaps the most difficult to address. Oculus has yet to demonstrate an “official” control mechanism for the Rift, instead letting each developer use the peripherals they find most suitable. I am speculating they may end up figure out a visual hand-tracking technology from a front mounted camera. So what is the best way to navigate in the VR world? Input is still a key challenge for VR as a pure look-based movement (turning your heads) supported with some analog input (mouse in your hand as an example) but sometimes the head is looking at a different direction and the hands are not in sync. This can causes problems as if the system is receiving two very different commands.

Expanding information conveyance is still early in the usability learning curve and we are a few years away before arriving at a dominant model. There are still many creative options we can explore and they are not mutually exclusive either. A voice based system guiding the user as an example. Once we start adding social interaction in shared virtual environments, it will explode. Social VR means social presence and this is a $20 billion dollar business at a minimal.

The inevitable evolution of inputs in some form of controllers will keep coming. Xbox and Playstation will need to think how to migrate their current controllers to take advantage of the new requirements (not easy) and we can expect to see more innovation from start-ups including companies such as Razer Hydra from Sixense, or camera-based systems which are limited by the camera’s line of sight. HTC/Valve is also working on some cool solutions aiming to provide the best and not just the first.

Immersive VR systems that alter your sense of physical reality can give user the illusion that you are located inside an unreal virtual environment – or a telepresence - the ‘sense of being there’ or ‘feeling of being there’. In the early 1990s this idea was transplanted to virtual reality, where instead of being at the remote physical environment, the participant was in a virtual environment with a sense of being at the place depicted by the virtual displays.

A Swiss healthcare hybrid MindMaze announced its pioneering move into the VR and gaming spaces with MindLeap. Combining headset-mounted neural sensors and motion-capture cameras, the system is designed to “facilitate neuro-powered immersive virtual and augmented reality” on consoles platforms as XBOX, PlayStation and Android. This is still in development and I am not sure if it can be done soon. They leverage technology developed by the company for a range of medical applications in treating neurological deficits, such as helping amputees control robotic limbs. Neurologial control is still a bit of science fiction and will be a long way before it can be mass commercialized. I like to dial my HTC M9 with my brain some day.

For now, we will be sticking with head-mounted and handheld controllers. They are enough for us to re-create boundaries and rethink presence. Every time you pick up a HTC Vive, you are about to enter a virtual boundary that didn't exist before. Exciting and also scary!

May 29, 2015

All companies go through some kind of crisis at some point but what does it take to get out of it? There aren’t many successful turnarounds in large companies and the bigger the company and the longer the history, the more difficult it is for any turnaround and its success rate is lower.

Harley Davidson in mid-life crisis when Richard Teerlink joined the company in 1981 as CFO, the company had US market share of 15% and reported a loss of $15m. The company was killed by its strong Japanese competitor led by Honda. In 1989, he took over as CEO and returned the company's focus to increasing quality, improving service and producing world-class heavyweight motorcycles. In the end it is the product that turned the company around. Harley Davidson recovered its U.S. market share to 50% and posted annual sales of more than $1.7 billion. Teerlink left his post as CEO in 1997, and served on Harley Davidson’s board of directors for another 5 years. He did a great job as a turnaround manager.

The story of IBM’s brush with bankruptcy is another greatest business comeback of all time. IBM’s problem was that it was quickly becoming irrelevant and experiencing zero growth. The company had also made some bets that didn’t work out. Lou Gerstner took control in 1993 and created more focus in the company. He did a great job as a transformation manager.

One lessons here is not mix up a turnaround with a transformation. It’s very important to distinguish between a transformation and a turnaround. A turnaround involves a company that has fallen off the rails and has executed poorly and still competing in the same product/market space. It takes a tough driven executive to make it work.

A transformation is truly a lot more difficult and takes a lot more deep wisdom with execution playing a secondary role. The company must fundamentally change its mental and operating model. It is a reinvention and companies who are used to doing things their way find it difficult to start doing things differently. This is not a 3 or 6-month initiative. It’s very, very strategic, foresight driven and problematic.

For any successful transformation, it takes leadership rather than management. “I hire people brighter than me and I get out of their way” as Lee Iacocca puts it. I am not sure who said something like “Inventories and supply chain parts can be managed but people must be led.”

I’ve both architected and supported quite a few successful turnaround behind the scenes as strategic consultant in my career, my simple advice for transformation leaders is people don’t just care what you know unless they know that you care. You need to earn that by caring and then knowing. It takes inspirational motivation to motivate managers to commit to the vision of the organization no matter how hard it is to achieve the vision. It also takes intellectual stimulation to foster innovation and creativity to challene the groupthink or yesthink. It is as much an intellectual undertaking as much as an executional exercise.

The world is not ending. Winning for tomorrow requires a vision. Brilliant strategies don’t show up spontaneously particularly for complex and fast moving industries. It comes from strategic dialogues, strategic foresights, options, even failures and mistakes. The ability to see the problem as a whole and then integrate a variety of perspectives and not simple quick fix. There is no simple quick fix.

April 13, 2015

Every one is an expert in marketing these days. And with social media, everyone is an ad critic. Not entirely a bad thing, but as marketers you need know how to filter the noise. People need to understand the difference between STRATEGIC MARKETING, MARKETING COMMUNICATIONS and CHANNEL MARKETING. These are three very different things. The first one is strategic and is tightly linked to business strategy and decisions are made based on what and how to invest, the second one is about advertising (there is no social only advertising or no advertising only social..either way that's where we're going) and the third is about activations and promotions in the field.

I am writing this blog post while shopping at a Prada store. It is a good place to write about marketing because luxury goods companies such as Prada understand building brand equity, communicating brand desire and staging customer experience. I bought my new Prada briefcase and shoes for three reasons in the following order: 1/ Brand 2/ Product 3/ Experience. I see many great design but their brand is never part of my consideration. Product is great and I need to like it. The experience makes me feel like buying more stuff.

There are many myths in marketing despite it is a relative mature practice and companies are still making the same common mistakes. Every senior marketers and CMOs can benefit from reading this:

Marketing Mistake #1: Marketing is all about driving sales.

Many people still confuse marketing with sales. Selling is only a part of the marketing function, but marketing is much broader than selling. It is not one is more important than the other. Marketing begins before a company design or conceptualize an idea or design or engineer any products or services. Marketing continues throughout the whole product’s lifecycle. Its mandate is the continued discovery of new ways to create, communicate and capture value. Marketing is not and should not be considered a cost; in fact it is an investment. Imagine if a business stops investing? If marketing cost is linked as a ratio-to-sales, them company will eventually enter a stage of stagnation and eventually decline (I am not saying there shouldn't be discipline in marketing resource management). But like any investments, it must provide a clear idea of how and when it will deliver a return on that investment. So marketing is a number of strategic investments and not just a cost item. The truth is any marketing dollars that are linked directly to sales improvement most likely are sales promotions that leads to discount and sometime brand erosion. The best marketing build brand equity and create demand. Field promotions, discount programs, sales incentives etc. are not marketing, these are sales operation expenses.

Marketing Mistake #2: Marketing is a department.

This is another common mistake that marketers make and that is to view it as a department within the organizational structure. And therefore marketing is the sole job of the marketing department. It is true that marketing is a function that’s organized within a marketing department. But if marketing thinking only happens within this department, I believe the company would not do well. Marketing is far too limited if it is left only to the marketing professionals. Progressive companies need to get all their departments to be customer oriented and focused. Marketing must be an integrated part of the entire organization, rather than a specific function. Successful marketing is the true integration of marketing, engineering, design, customer service, community management and operations beyond simply putting a multi-disciplinary team together. The team must be supported and managed effectively in an environment where each discipline respects and appreciates the perspective of others. Look at some of the most successful companies today and see who in the organization sets the marketing direction for those companies. More and more, it’s the CEO who’s also becoming the CMO while not officially although they do not usually carry that title.

Marketing Mistake #3: Marketing is all about the big idea and the marketing mix.

Marketing is often being marginalized to just coming up with the big idea and then managing the marketing mix and communications. Gone are the days of the Big Idea (Leo Burnett’s in the 80s). Many executives today still believe that marketing is about getting the “big idea” from their agencies and spending money effectively on the advertising and promotional mix. In another words optimizing your advertising dollars, will lead to a successful marketing campaign. It doesn’t matter what products they are marketing, many executives believe that the key to a successful campaign is to work with their advertising agencies to come up with big ideas to differentiate their product in the marketplace and win a few advertising awards along the way. The traditional marketing model is obsolete and many clients and agencies are still operating this way. Marketing is not about mix, it is about telling your story in the most authentic ways and the best way to do that is from their leaderships. The big idea is not about the advertising, the company itself should be the big idea! They missed it completely. And the marketing mix is not about the media, it is about orchestrating both mass and individual social conversation at scale.

Marketing Mistake #4: Try as hard as you can to sell.

For brands to sell they have to stop selling. Unless you’re on DTV or doing a tactical DM campaign. For brands to win the hearts and minds they so crave and to engineer brand desire, they must first earn those hearts and minds and tell people who you are and why you’re here. What is your purpose? Where does your company’s passion lie? What are your greatest capabilities, and what do you have to offer? What need do you see in the world that you are operating in? And you must earn your relevance through a view of the world and a perceived role within it that is a clear break from the bygone advertising practices of the 80s. Sell hard by selling less. Any advertising that tries too hard to sell will not work.

Marketing Mistake #5: Listening to your customers.

Today’s technological advancements have given companies the ability to target and talk to customers in a more precise manner. Yet, the new technologies allow us to listen to whatever is going on out there. Failing to use these tools effectively will result in companies totally disconnected with their customers. Social listening is not an option; it is the core of marketing intelligence. Don’t waste money on useless focus groups.

Mistake #6: Not listening to your customer.

This is the key difference between “Market Drive” and “Market Driving. Customer input is valuable in helping companies develop incremental innovation. However, customers are usually unable to conceptualize the benefits of revolutionary products, concepts and technologies. No market research will tell you what’s the next big idea. And no customers or your trade partners can tell you how you should do your marketing. Your customers can tell you the things that are broken and they want you to fix it. Listen to them. Make sure they know you are listening and make them happy. But they won’t create the future roadmap for your product or service. That’s your job. No you listen to your customers but you should never ask them what they want. They will tell you they want a car that self-drive and can fly.

Mistake #7: Making everything a CMO problem.

The average tenure of a CMO is 12-16 months these days and is getting shorter. No one wants the CMO job. The shortness of the typical CMO’s tenure is a tangible manifestation of corporate management's frustration with the inability of marketing to create economic value let alone the inability to drive change and transformation. Good marketing not only transforms customers but it should first transform the organization itself. Many CMOs are traditional marketers who are usually great advertising tacticians. Trained for years in traditional advertising, their primarily focus was in marketing communications activities to build brands. Many lack the strategic thinking and CMO must also relentlessly focus on unifying the disparate functions of marketing, operations, sales, service, and technology. For most companies, such integration suggests an unholy alliance of warring fiefdoms and silos, and that's precisely why the C-suite needs an individual with the power and authority to deliver the results. Marketing is about the customer experience.

Marketing Mistake #8: Marketing is a pure science.

Marketing can become over obsessed with logic and lost sight of the magic. Marketing has always aspired to be an “accurate science” status and has been searching for the best formula. Sometimes people are using fake science although data is becoming more and more important for marketing these days thanks for big data. Even with those data, we should not lose sight of the most important of marketing: magic, mystery and mastery.

April 05, 2015

Robert Parker is the most widely known and influential wine critic in the world today. His popular wine scoring system was the first simple way to determine the quality of wine. Parker is known for his preference for powerful reds from Napa and the Rhone and has inadvertently made becoming a wine critic almost impossible, since— in part because of the success of his scoring system. That takes a lot of fun away. Can you imagine we have scorecards for wine, food, paintings, music and dance? We can do that for business but not for art. Wine is art. Well perhaps business is art too!

Getting 90 points means a wine is of superior quality and character and is something you can share with confidence with friends and clients. And they don’t necessarily have to be expensive and sometime can be within reach. If a 90 point wine costs $30 then it is a smart choice. But it should not automatically means that you will like it? Same thing for business, an outstanding business model that delivers above average return may not necessarily be the right business model for you.

Wines rated 95-100 are considered classics, the best of their kind. Less than 2% of the 20,000 wines we review each year earn “classic” scores. Wines rated 90-94 are outstanding examples of their types. Wines rated 85-89 are “very good,” and under 80-84 are “good,” that is, they are clean, balanced and enjoyable. Anything below 80 points are generally not recommended.

I am not a wine expert. But I pick wine for all my best friends. But I think wines can be both good and good value at any tiers. I can recommend good wines that are ranked under 80 and bad ones over 85. For example, if I want a bottle for a weekend dinner with friends, an 85-point wine at $25 to $30 may be a better choice or good enough choice than a 93-point wine at $75 wine that requires five years in the cellar to reach its full potential. There is something call good enough. And it applies to wine, design, marketing and engineering. Over design, marketing or engineering often achieve the opposite results.

You need to understand the wine descriptors and understanding which wine embodies which traits. Scoring is only for general guidance. I find these traits can equally effective to apply in scoring of business strategies and models.

BALANCE

Wine like Pinot Noir needs to achieve a balance between the acidity of the grape against the flavor and texture. For business, you need to look at the business strategy to ensure a balance between investing for growth and delivering earnings. To avoid underinvesting that can cause a downward spiral. Yes you still need to deliver a P&L at an acceptable level in terms of earnings and ROICs but should never be at the expense of staying relevant and jump starting growth.

Recommended: Montecastro, Ribera del Duero, Northern Spain Red.

STRUCTURED

Structure is the framework that supports the elements of flavor, tannin, acid and sugar. The structure dictates the first taste to mid-palate to the finishing flavor. For business, a proper structure ensure there is a flow from ideation of new business opportunities to understanding what market it is trying to serve to the final go-to-market planning. The first taste of excitement of an innovative idea needs to be executed flawlessly and it takes a good structure.

Recommended: Louis Martini, Sonoma County Cabernet Sauvignon.

FRUIT FORWARD

Remember that first sip of wine provides you with the flavor of fully ripe fruit. That’s the kind of wine I like. The fruitiness rushes into your mouth. Fruit forward wines are primarily about the grape / varietal expression, over the expression of either place (i.e. terroir) or winemaking practices such as the use of oak, lees contact or managed oxidation. This is the same for business, customers need to get the sweet taste and delight in the form of customer experience when they first encounter your brand. Companies that do a good job in creating a memorable delight can be ahead of its competitions. In business, it means Delight Forward. Unboxing is a good example.

Recommended: Dehlinger, Sonoma County’s Russian River Valley.

BRIGHT

A wine can be visually bright, have bright aromas, or flavors. In each instance the wine is perceived vividly with high clarity. A business can be bright, it is when the company successfully create a culture of “brilliance” – a lot of common sense in how decisions are made by mid-level management. Bright is independent of experience. The ability to think quick, to look at options, to compare and synthesize—all these skills are particularly important to build a culture of "brilliance". The cycle of exploring, mapping and reasoning, asking the right questions, is really what builds organization capability to think critically and be brilliant. The best companies are always in pursuit of brilliance.

Recommended: Frei Brothers Reserve, Russian River Valley Chardonnay

There are two more attributes in the scoring system: Creamy and Fine Tannins. Anyhow, these scores make it simple for some to look at a wine, But it is actually quite difficult to pin down. Is an 89 good, very good or great? Is there really a difference between wines rated 91 and 93? Knowing that there are inconsistencies, prejudices and palate differences so wine needs to be re-tasted every couple of years. The same case for business, a business strategy that is working needs to be revisited every few years.

"Nothing makes the future look so rosy as to contemplate it through a glass of Chambertin" -Napoleon Bonaparte

March 27, 2015

So you are ready to transform your organization? You want your organization to leapfrog the industry? You want to deliver above industry average growth? And do you know what are the most common mistakes that leaders and even very smart and experienced leaders make? The most common one is sticking with the usual way, the easy way and the proven way. There is no usual, easy and safe way if the company has not been doing well or satisfactorily underperforming. It is not just about making a good product anymore. Leaders need to ask how does one make a meaningful contribution to society with product?

Whenever I was tasked to help global enterprises to move the next level, the first thing I did was to stop them from doing things the same old way. It was never easy. You don’t go the next level without taking calculated risks, offending people and forcing people to do things differently. No one wants change despite whatever slogan or lip service about how people want change. And everyone wants breakthrough. There is no free lunch. No pain no gain.

I’ve been working with some of the best high performance global leaders for decades to breakthrough and manage large scale transformation. These are the five most common mistakes CEO and their executive team make and all can easily be avoided.

Failing to build organization energy and momentum. Organizational energy is the invisible force which an organization uses to purposefully put things in motion and drives positive behavior to advance the company’s mission and business objectives. The strength of organizational energy manifests in the extent to which a company has mobilized its emotional, cognitive, and behavioral potential in pursuit of its goals and it makes company resilient. Energy traps often endanger productivity and innovation. You must understand how to release them from being trapped. This is not a one off exercise and cannot be performed by consultants. It is the executive team’s job.

Failing to have a vision and to translate that into a compelling and relevant story. Company cannot develop a strategy without a vision. A vision is not just a statement that vaguely describes a company’s aspiration. It needs to be authentic and anchored on the industry’s competitive reality and illustrate how that future if realized will benefit the organization and allow it to prosper and thrive. The vision needs to show the shared common destiny and a path to get there. Vision without strategy is worst than not having a vision.

Failing to understand how to create value and understand the core value drivers. This is very common for management and it is critical for the top 10 and all C-2 executives to understand what are the critical drivers of value for the organization. These ideas need to be deeply embedded in day-to-day managerial decisions. In mapping out company’s processes and decision structures, the CTV (Critical to Value) notion needs to be reflected in CTQ (Critical to Quality), QTR (Critical to Revenue) and CTC (Critical to Culture). Three of the most important metrics to organizational health. Getting the right decisions on a few of these key CTV points, the company cannot be too wrong even though it may make many execution mistakes which sometimes is unavoidable.

Failing to assemble a super team fast. Any successful transformation needs to have the support of a small high performance super team. It takes time for an organizational to rebuild capability and even hiring new people from the outside takes time. It is crucial that a company needs to assemble a swat team for quick deployment to solve any problem. Any problems that are left alone will signify that new management’s inability to drive change. Problems need to be fixed fast. Otherwise there is no credibility. This super team should always be looking out for the organization. They are people who take decisive action to solve problems. They are people who understand the vision of the company. And they are the people with high analytical ability (typically with management consultants training) and ready to look at any problems even without the experience and domain knowledge.

Failing to get rid of bad organizational habits and the incompetents. Any underperforming organization has bad habits and usually a lot of them. Be it leadership habits or organizational habits embedded in the mental model of leadership or organizational design. The first thing leaders must do is to get rid of these old habits and dogmas and people that are underperforming. The bottom 10% of managers must go. Don’t waste time on them. What do we mean by being strategic?

At the end of the day, smart leaders must ask the following five questions:

Do you understand the critical drivers of value and what are critical to quality/competition/performance/culture? Are they part of your management team’s KPIs?

Are you doing enough to focus or leverage investments in your core value proposition and brand story? Are you cutting back or divesting fast enough on unnecessary and non-strategic investments?

Can you name the top 5-10 people in the organizations that could potentially become part of your super team? If you can’t name at least 5, you have a problem.

Where are you spending the time? Are you devoting enough attention to matters that are important to building strong energy and momentum?

Are you applying data-driven perspectives on all aspects of decision makings and what areas you are not feeling comfortable that data might not be right or not properly interpreted?

January 25, 2015

The US mobile industry has been in a clear state of duopoly with Verizon and AT&T occupying about 70-75% of both consumer and enterprise market. T-Mobile is attempting to disrupt the current status but the impact will not be sustainable although its Uncarrier attack effort is causing a lot of noise. To maintain competition and sustainability for all is a tricky balance and the key is to ensure it will not endanger the long-term ability for players reinvest in next generation networks. InterDigital, Qualcomm, Ericcson, and Samsung are actively involved in 5G wireless development and carriers need to be ready for the next upgrade cycle in 3 years.

Strategically speaking, an industry structure only becomes stable when three firms dominate a market or 90% of a market, when the market share ownership reaches a ratio of roughly 4:2:1. Simply, the number one provider has market share double that of number two and it doubles that of number three. With AT&T and Verizon roughly splitting the market, with Sprint and T-Mobile US struggling to grow their market share. This gridlock is not changing unless either AT&T or Verizon acquire Sprint or T-Mobile. Then there will be only two players left.

Duopoly may not be good idea for consumers. Although duopolies will eventually lower prices as much as perfect competition would. More than 270 million US customers (roughly 91.0% of the total US population) have the choice of three or more wireless providers, while 250 million (or 82.0%) can choose from among four wireless providers. For everyone, subscriber growth is slowing as we are near market saturation. This slowdown means acquisition costs will increase, as everyone is spending more to steal each others' customers. Spending to get new customers is not a way out. Carriers need to think how to reinvent their business models. That won't be possible unless they can a highly differentiated offering or customer experience. There are only two ways to do this. AT&T has been the most aggressive in expanding offering new services providing home security and automation services and providing cellular connections to non-smartphone devices or any IoT. It will pay off for them.

In the world of 4:2:1 market share structure, everyone is trying to invest on revenue growth through promoting churn. And the shifts in market share at similar prices for similar products depend upon the relative willingness or desperation of any one plater to invest at rates higher than the sum of market growth rates and the inflation rate. If markets are growing at1.5 %, and the inflation rate is 1.5%, than a leading contestant has to invest at rates greater than 3% annually. Any firm not willing to do so loses share.

If every player is willing to do so, then prices and margins will be pushed down until at least one or all stops investing. That is the case for Verizon and AT&T, and underpins the argument advanced by Sprint and T-Mobile that they cannot prosper in the long term unless they are allowed to merge. For Sprint, they are taking customer away from T-Mobile with trade-in program, as part of its "Uncarrier" program, T-Mobile will match trade-in pricing from other carriers. So, it's possible that the company could match whatever deal Sprint offers. And Sprint also has a matching program, so it goes on and on unitl one of them cannot afford it anymore.

Now if Google is starting its own cellular service (very likely) by buying capacity on T-Mobile and Sprint networks in the US. That would essentially create a disruptive scenario. Although for the last few years the competitive threat from the mobile virtual network operator (MVNO) looks to be subsiding; but by buying capacity on the networks of T-mobile and Sprint, the company will come into cellular business directly and it will offer Google phone and data plans to customers.

The question remains if Google’s intent is to create a limited market roll out or a full-scale national share grab. The word out there is Google is launching the service later this year. It will for sure be a very affordable package. And will Apple follow and buying capacity from T-Mobile and allow services for Apple devices? Apple’s entry will create the “The Prisoner’s Dilemma” for carriers. The carrier’s biggest fear is that if it says “no”, the business and growth would go to a competing carrier and yes they are fueling Apple’s market power. iPhone customers typically spend as much as twice or more the U.S. national average monthly wireless bill. So with Google entering the game and speculating Apple might do the same, the industry structure would definitely be destabilized. It is not reasonable to think Google might be able to take up to 2-3% share from AT&T and Verizon. The carriers won't be too happy. But the threat to carriers is small and mostly in the long term.

December 31, 2014

This marks the end of another year. A very busy and fruitful year for us. Personally I was on the road for more than 200 days and I need to take a break - perhaps 3 days. What about my New Year's resolution? I need to cut down on drive and email. I need to cut down on attending unprodcutive meetings. I need to find three people to mentor that they can become the best. I need to revisit places from my childhood that were memorable. I need to back up my hard drive (I am 96 days behind). I need to produce a mini feature film and shot entirely with my HTC phone. I need to cut down on my public speaking. I need to have more discipline on getting enough sleep.

For companies, it is time to think about growth. Every company wants growth and it is harder and harder to come by. Many companies are busy defending their shares and don't even the luxury to think growth. The most successful growth companies adopt at least four best practices:

Earn the rights for growth (business design/cash flow/business architecture etc.) and first focus on the core

Understand discontunuties and when is the next S-curve coming

Always think like a designer and think "customer value" first

Seeing the whole opportunity horizon and understand what it means

A common mistake is comanies jumping into some cool ideas that are simply just novelty and blindly believe that it is growth. The secret for growth is having a robust strategy. Here I will share a little of my secrets or not so secrets. Before that I want to make sure you know that easiest way to fail is by jumping into the future without figuring out a path to get there. You must have a plan. A plan that shows the whole opportunity horizon (built-on-robust foresight) and careful analysys of the industry economics.

There’s no magic solution to jump-starting growth. Growth is a strategy but also a mindset, it depends on how you see and shape your future by the action you take today. It takes more than a vision. It goes beyond just having the best product on this planet. Best product is no gurantee of success today. Often good enough products stand a better chance.

Remember, some used to say that strategy is about “Speed, Price, Quality – just pick two.” I’d tell them, even if you picked them all, it is still not enough. You need to pick, “Speed, Agility, Focus, Quality, Relevance and Price”. Not one, but all, if you are playing to win. Despite popular books and articles may be telling you to try and fail often and even to celebrate failure, I don’t buy those ideas at all - these are excuses for people taking uncalculated risks. Risks are not just unavoidable, but needs to be managed. It needs to provide a calculated return, and not just say take risks and fail fast. That’s for amateurs.

Companies need to understand the full spectrum of their opportunity horizon. And once it is understood, then it takes focus. You also cannot just react to the future because by sitting and waiting you will miss it. You also need to understand the opportunity horizons that you are looking at and how each horizon can be impacted by different degrees of uncertainty. It is more than just aspirations; it takes strategic thinking and a lot of sense-making. After all, corporate strategy is a game of sense-making and organizing for the future. Yet there are multiple futures and the trick is how do you decide to play just one or more than one. This is the part that is difficult for many as they see strategic planning as a mechanical and linear exercise.

First we need to look at the future through three different opportunity horizons then we have a pretty good picture on what is needed and how to act to positively impact a winning business strategy. When we look at successful companies that often playing in different horizons while not necessarily winning all, there are a lot of common factors. But that’s a much longer post to write and for today, let’s look at these opportunity horizons in three stages:

Opportunity Horizon 1: Redefine and reinvent the core. This is about rethinking the core and how to make it relevant. Or how to defend against low-cost high value competition etc. At the minimum it needs to stop market share erosion and if done properly it should be able to jumpstart growth. Reinventing the core requires going deep into the company's core belief system and to realign it with what's going on.

Opportunity Horizon 2: Extend core businesses into related adjacencies. Companies should expect 20-30% of their revenue to come from products or services that didn’t exist today and they should share some economic synergies with the core. Not only should it deliver additional revenue, it should enhance the core to strengthen its portfolio.

Opportunity Horizon 3: Initiate strategic transformation. At this stage, the company should in a good position (both strategically, organizationally and financially) to invest in full transformation, which includes shuffling of business units, assets and markets. Not every company can afford a transformation and they need to earn the right to do so. Many make the mistake of starting a transformation on day one when the company was not in any strategically or financially sound position to do so. Transforming without a stabilized core is a recipe for failure.

I have helped many large companies to orchestrate growth and it takes more than creating continuous alignment and killing projects that are sucking up resources. Killing projects that are not strategically aligned means signaling a changing behavior. A lot of energy is needed to deal with changing legacy behaviors — those that are expended toward the old strategy and not the new strategy. Companies often run on auto-pilot without even knowing it.

Implementing a growth strategy means one must balance activity between constant reinvention of existing current management practices and fostering behavioral change to prepare for the new. It means they should challenge managerial assumptions about how do get things done, what risks to take and the rationale behind them, and develop a list of desired or optimal behaviors that align with strategic goals, and have managers create a “let it go” list of legacy behaviors to eliminate. It is about getting rid of the old and creating new ones all at the same time. Perhaps that is the plan for the New Year.

November 15, 2014

The world is suddenly obsessed with smart technologies and this time around it seems unstoppable. Our everyday electrical and mechanical industrial object will now be occupied and ran by software and connected to the cloud. It also means each object (as small as some smoke detectors and as large as automobiles) will now be equipped with tons of sensors and can be able to adapt to different environment and individual needs.

It is essential that the next wave of industrial revolution will make us more efficient and empowered (and more human I hope), and data will be at the heart of this revolution. That's another big conversation. All the Nest, GoPro and Beats received multi-billion-dollar valuations through private investments or acquisitions and everyone is wondering why these hardware companies suddenly in such high demand. Because hardware and software are going through different commodity lifecycles and now software is becoming a commodity. They used to be difficult and expensive to develop and even to deploy, that that is changing. It is hard for software company to get into hardware much as hardware companies struggle to get into software. Hardware cannot be done by a few geeks in the basement, and involves massive R&D and specialists including megatronics engineers, electrical engineers, industrial designers, wireless engineers and usually takes a longer time to develop.

Software you can fix it with a download, and hardware you can’t. They are massive supply chain challenges when it comes to logistics and component supplies. The value of firms who can marry software and hardware will have a competitive advantage over their competitors. Essentially everything we use today will be fitted with some sensors, processors perhaps, and may be a screen and will recarnate and become of Internet of Things. For the last three decades, software engineering has advanced to a state that sophisticated codes can be embedded into machines. And the availability of cheap sensors and super powerful processors is powering this cycle of data revolution. All of a sudden, software, hardware and communications infrastructure are advancing us into a new era. Old world manufacturing + low cost computer processing + ubligious computing + cloud = smart new world and many cool products.

It sounds like the Apple story all over again, does it? The hardware and software integration capability of Apple, the ecosystem, the brand and user experience are now not only inspiring consumer gadgets company, not it’s influence is beyond its own industry. I know this is an overused story, but he Apple influence is still here, and perhaps it will be here for a long time even when the company stop creating great stuff one day. Microsoft ex-CEO Ballmer saw that coming in 2012 in a letter to shareholders. "It's important to recognize a fundamental shift under way in our business, we see ourselves as a devices and services company." Microsoft had the strategy right but couldn’t execute it fully with the exception of X-Box. Microsoft’s future revenue will still be coming in from software and it isn't going to change anytime soon. The transformation from software to hardware is harder that you think.

The idea that hardware is now the new software is pretty real. There is a business model implication here. These hardwares are mostly priced between $100 to $250 and they a gateway and great way to sell software. We are seeing a revival of hardware and this time, it is hardware first and software and then date on the cloud, it will bring new technological advances in cloud-powered hardware that boosts productivity, efficiency and manifests as beautifully designed objects that fit into our hands and homes.

September 16, 2014

Everyone is looking for a breakthrough. The massive shift in generation differences in consumer behavior and rapid technological shift are casuing many companies to fail.... and it will happen fast. Companies that are stuck in their old mental model cannot breakout for many reasons. It is usually a combination of all that causes them to be irrelevant. It includes leadership’s blind sight, organization legacies and lack of foresights and the list goes on and on...

How often companies can act swiftly and not taking a wait and see attitude? All the time. It takes strong leadership to take bold decisions even though they feel fear while making these decisions. Here are a few ideas, which I often make accessible to a my select clients. How do breakthroughs happen? It is not just luck or strategic thinking. Can they be engineered? Are there preconditions? Or is it a skill that we can develop and learned? When companies are stuck whether in an old paradigm of doing business or a legacy business design, they need breakthrough.

Exploring the “Grey” area. The central core of organizations contains beliefs that were built up over the years and a value system that provides us with perspectives of the world and forms the grayscale of our personality. Seeing the world in black and white is terribly dangerous. Sticking to your core does not mean you should not understand the ‘grey’ around it. Making explicit attempt to push the “grey” area of what consider your core.

Anticipate and Leverage Moments Most breakthroughs don’t happen through excessive rationalization or planning. In fact, almost all breakthroughs are sparked by “moments.” This is one of the things I teach people about looking for breakthroughs. The process of finding any breakthrough – whether in business, technology or design – often involve immersing oneself in large amounts of data and extensive debate and synthesizing information. Most people fail to see the moments when they happen or fail to capture them. I have a long list of things you can do to maximize it happening.

Expand Awareness through Emotions. There is so much myth about emotions; we often associate them with the extreme cases when we overreact or how they prevent us from making the right decision or making us too aggressive with the things that we want. These are all true, but emotions also have a positive side – if you know how to use them. Emotions are our inner sensors at work, sending us weak signals from the outside. It triggers our desire to heighten our senses as our whole and even affect our brains in memory, basically expanding the operating parameters of our cognition. It helps us take in more information, store them in a deeper place inside our mind, hold multiple ideas in mind at once, and layers a feeling over objects and situations.

Imagineering as Daily Ritual. Unless you’re in the business of creative production such as film, animation or video gaming, most likely you don’t have a need to use imagination in your daily work. But imagination is not a tool we can call up on demand; we need to practice it every day in order to maintain our ability to imagine. Imagination is a major part of how we frame and solve problems. The practice of applied imagination (or imagineering) can increase the number of creative options available for a specific problem that we’re trying to solve. Imagination is part of our subconscious way to assist with idea generation. You’re not so much thinking of specific ideas of how to solve a problem, but rapidly and randomly envisioning what might be, what could be, and what couldn’t be. It's very easy to compare creativity and knowledge in an abstract, metaphorical sense – but we know that our imagination is developed from the knowledge we gain in the experiences of our daily lives and little encounters.

Practice Design of Meanings. Try to design a breakthrough project or pilot activity for yourself as experiment. Some breakthroughs are sparked by eureka moments based on insights – but far more are based on design. Design-driven innovation is spurred by thinking about possible breakthrough features, meanings and product languages that could emerge in the future. This cannot be done by talking to consumers or looking at current user behaviors. Consumers can’t really imagine radical futures, as they are anchored and invested in the current one; thus they are not helpful in anticipating possible radical changes in new product meanings. Big breakthroughs don’t necessarily come from disruptive applications or advanced functions; sometimes it’s new meanings that shift the universe. Think about how every one of the everyday objects that we see around our home can be transformed: instead of being simply functional, consider how to turn them into symbolic objects of irony, desire and affection.

September 01, 2014

As everything is moving faster and less predictable as it seems while organizations struggling to understand what it means and what options to take and how to land on the right decisions at the right time.The results often are inactions or delayed repsonses that cost companies.

Both senior and middle managers’ job include understanding, interpreting and communicating options for executive decisions, both as change agents and advocates. The toolkit that they have is very limited. Sensemaking is a vital skill and a new managerial discipline that is lacking across many organizations and functional units. How do we define sensemaking? It is how we try to make sense of the world and associated challenges so we can see and act in it. It also carries the concept of sufficiency, which is whether we know enough about the interrelationships and dynamics of the scenarios (events, places, people etc.) to make a contextually appropriate decision.

The two main academic thinkers in the field are Karl Weick and Brenda Dervin both of their work are very user readable. Weick I think tends to apply a more normative and organizational approach while Dervin looks at individuals and communication. Karl Weick emphases the importance of “mapping.” It is not enough to collect a lot of data, as we do these days and it is often overwhelming for managers, what is really important is that we need to take that complexity and map it in a simple way that can be communicated and shared so that a team or an organization can have a shared view of what the environment is like right now. Make complexity communicable but yet not making it overly simple.

I have seen people drawing simple circles or big maps with arrows and boxes but fail to communicate anything except the situation is complex and end up comfusing themselves as well as others. So beware of those fancy arrows and boxes that are useless. Good mapping provide managers with the benefit of seeing what’s going on and comparing that with their mental models. Good decisions making depends heavily on good sensemaking that includes important cues and signals so managers and senior executives can have a bigger capacity to make sense of uncertainty and emerging behavior. It has always been a core part of our strategic design thinking toolkit and there is no shortage of demand from clients to learn that skills.

June 01, 2014

How do breakthroughs happen? Can they be engineered? Are they pure luck? Or are they the result of skills that we can develop and improve upon over time? Along with the fear of the unknown and the pressure to make it happen, breakthroughs come with an incredible sense of possibility and satisfaction.

The experience of uncovering a breakthrough is exhilarating and hard to explain. It’s a sense of not knowing exactly where I am going, but knowing that I am going somewhere. Here’s my secrets to achieving breakthroughs:

Preserve the “Me”. The world we're living in today seems to be a completely different one from 10 or 20 years ago and a crazie one. Sometimes I wonder if the world is really changing that fast at a break-neck pace. There is a notion that if you can’t change the world you should change the way you look at it, but I don’t like the idea of changing myself according to the world and adapting to it. The central core of what’s “me” contains beliefs that we’ve built up over the years and a value system that provides us with perspectives on the world and forms the grey scale of my personality. Black and white only exists in film, photography and my Prada suit; seeing the world in black and white is terribly dangerous. The person who views things only in black and white will always be miserable or unsuccessful in whatever they pursue. That’s not and never was the rule of the universe. Sticking to your core does not necessarily mean you are not open to the world. It means you open the world to “you” and everything you experience adds one more layer of sophistication to the “you” and heightens your awareness and sense of being. Any personal breakthrough need not give away or suppress the “you.” What you experience every day should make a beter “you.” Breakthroughs require the “you” in “you.”

Anticipate and Leverage Moments. Most breakthroughs don’t happen through excessive rationalization or planning. In fact, almost all breakthroughs are sparked by “moments.” This is one of the things I teach people about looking for breakthroughs. The process of finding any breakthrough – whether in business, technology or design – often involves immersing oneself in large amounts of data and extensive debate and the synthesis of complex information. Most people fail to see the moments when they happen or fail to capture them. I started working to facilitate these moments a long time ago, making them happen more easily and more often. How I ask questions and how I push people to their limits (as I do with my staff) is one way that I try to help them to experience moments. I feel bad for sometimes being seen as critical and demanding, but that’s how I get myself and others to create those moments.

Expand Awareness through Emotions. There are so many myths about emotions. We often associate them with extreme cases where we overreact, when they prevent us from making the right decision or make us irrational pursuing things that we want. This is all true, but emotions also have a positive side if you know recognize and respond to them. Emotions are our inner sensors at work, sending us weak signals from the outside. They trigger how we expand the operating parameters of our cognition, help us take in more detailed information, hold multiple ideas in our minds at once, and ascribe meaning to the things, people and events in our lives.

Imagineering as Daily Ritual. Unless you’re in the business of producing film, animation, video games or other highly creative outputs you most likely don’t have a need to use imagination in your daily work. But imagination is not a tool we can call up on demand; we need to practice using it every day in order to maintain our ability to imagine. Imagination is a major part of how we frame and solve problems. Much like yoga, tai chi or voice training, imagining requires that we put in practice time in order to expand our ability. Applied imagination (or imagineering) can increase the number of creative options available for specific problems that we’re trying to solve and help with tasks like ideation. Rather than focusing on developing ideas or how to solve a problem, Imagineering is about rapidly and randomly envisioning what might be, what could be, and what couldn’t be. It's very easy to compare creativity and knowledge in an abstract, metaphorical sense – but we know that our imagination is developed from the knowledge we gain in the experiences of our daily lives and works by employing that information subconsciously until it’s ready to break through into awareness.

Practice Design of Meanings. Try to design a breakthrough project or pilot activity for yourself as an experiment. Some breakthroughs are sparked by eureka moments based on insights – but far more are based on design. Design-driven innovation is spurred by thinking about possible breakthrough features, meanings and product languages that could emerge in the future. This cannot be done by talking to consumers or looking at current user behaviors. Consumers can’t really imagine radical futures, as they are anchored and invested in the current one; thus they are not helpful in anticipating possible radical changes in new product meanings. Big breakthroughs don’t necessarily come from disruptive applications or advanced functions; sometimes it’s new meanings that shift the universe. Think about how every one of the everyday objects that we see around our home can be transformed: instead of being simply functional, consider how to turn them into symbolic objects of irony, desire and affection.